tv Street Signs CNBC August 18, 2014 2:00pm-3:01pm EDT
dollar general stepping in to make a big deal. and the euro getting hit. people are worried about europe going back into a recession. traders talking about how that is a positive. >> that will do it for this edition of "power lunch." >> "street signs" begins right now. is america the safest place in the world for your money? it looks like it again today. happy monday. we are going to hit on the continued run in stocks, where to invest and what the biggest risks still might be. why the restaurant industry seems to have been turned upside down and the cool segment on wearable technologies for professional athletes. >> let's take a look at what is happening with the markets. march 2000 the turning point.
the nasdaq over here is up by 39 points so clawing its way back to where we were at the end of march. not the beginning but at the end of march when things had started to turn south. today the first four-day winning streak in about two months. the s&p up by 0.8%. averages of the highest levels of this month so far. got a little way to go. let's go to the floor of the stock exchange. mary, big rally on our hands today. do you feel that quite a lot of this is about what did not happen over the weekend as opposed to what did? >> a number of traders saying the fact that you didn't see escalation in ukraine or iraq one of the reasons investors have come into the market in such a strong way. it is relatively light volume. the drift you can say more than a drift the push has been higher
throughout the session. we are seeing stocks are hieing across the board. the volatility index continues to hold that down. six out of the last sessions seeing gold down and oil down as the risk off trade in favor. the dollar getting a bid, as well. we have seen a big pickup in treasury yields. one group is the transports benefitting from the decline in crude. the transports led by the airlines, very strong today helping to lead the industrial sector, as well, which is one of the strongest performing sectors within the s&p 500 sectors. financials and consumer discretionaries which need a bid or a boost from retail stocks. >> thank you very much. rick santelli, starting to think only could move down but i guess today we have proven that wrong. >> up 1% in the dow and a blind
folded treasury trader would say most likely rates went up. they went up from 3.34 to 3.39. we have had a selloff but prior to friday. i don't know that social media in ukraine and kiev and russia will garner facts. there is a lot of nervous equity traders skating on thin ice. prior to friday's close, 3.41 was the current low yield close. we are getting basically up to that level and still hovering at yield closes we haven't seen in about 14 months. it is not blind nationalism to say america has been the safest bet for your numbers lately. the s&p 500 up nearly 7% while england, germany and japan's main markets are all down. there is nothing more american than the small cap stocks. they get most if not all of their sales here from the usa.
let's get actionable advice. mark travis and eric marshall joins us. mark, i will begin with you. we have had a good run the last few years. is it over or is there room to run? if so where are the investable spots? >> it is getting tougher and the road steeper. with that said we do have investments that we like and the valuations we like. i think viewers have to keep in mind the last five years have been virtually straight up and the russell 2,000 is a beneficiary of that. if prices are ever to break i want to have a valuation to support me and my portfolio. >> that is your view on the overall market. your job is to take your clients' money and find them opportunities. i'm assuming there are still some opportunities out there. maybe not the whole thing but individual stocks? >> yeah, there are a couple we like right now, not to destroy
the usa theme of this segment. there are a couple in canada that we like. >> it is still north american free trade area. we like chorus entertainment. we think that is interesting play. it is out of shaw communications in 1999. heather shaw is the chairman. you are kind of paid to wait with over 4% dividend. america will pay that 15% withholding. the central planners in canada, they have them in canada like we do here, are trying to decide if people will have pick and pay as opposed to bundle cable services. that has kind of suppressed valuation. the shares are in the mid 20s, low $30 range canadian. they survived the recession in 2009. >> getting back to the broader theme of the conversation here it is dangerous to make
assumptions. when people say it is the safest place to be, the united states, push back and tell me what would it take for the world to change that assumption. >> well, maybe i think it all comes down to earnings and fundamentals. and at the hodges fund we are laser focused on what is going on with the cash flow and earnings of the companies we are investing in. we see conditions improving. i would agree with mark that this is really the area especially in small cap land to pay attention to valuations. because while you have seen multiples come up for small cap stocks among those there are opportunities where things still trade at very reasonable multiples. >> like what? >> one that we like is view point financial. this is a regional bank. they are merging with a private bank, legacy bank to give them density here in north texas.
we think they have a great management team that will unlock a lot of value there. we like eagle materials, a low cost provider of cement and wall board. they have a fracsand business that isn't being fully recognized and appreciated out there by the street. and then lastly i'll mepgz a company called blackbaud that focuses on nonprofit organizations which is a very under served niche. we think this will continue to grow much faster than the broader market. >> well, it looks like in terms of whether or not we are the safest place to be it comes into which specific stocks you are in. >> i guess i will see mark travis at a montreal football game. here is a riddle for you. when is a dollar worth $9.7 billion?
when your name is family dollar. courtney reagan is here. tell us about the bidding war. >> dollar general courting family dollar weeks after dollar tree made a surprise bid. dollar general offering $78.50 per share in cash for family dollar. that is better than dollar tree's $74.50. dollar general estimates up to $600 million in cost synergies with family dollar. a dollar general family dollar combo. dollar tree family dollar would yield 13,000 stores in 48 stores and canada. dg says dg expressed interest in
merging with fdo noting he wouldn't have announced his retirement if he knew the deal was coming. this is far from over. we don't know who will get married, what the stores will look like. we will follow it all along. >> we will have this conversation right now. mary epineur from retail analysis. is this all a strike at wal-mart and target or something bigger? >> it is both to answer your question. i think that they would do this because it just makes sense. it is a really great way to save money. they have excellent systems. it is a great marriage. one is country and the other is a little more urban. and they are both very nimble and can get into product quickly and offer newness. it would be a perfect thing to have cost savings. >> back to the question about wal-mart. do you think wal-mart executives were like dang or are they not phased by this? >> i think they would be phased by this because they have been eating their lunch for a while.
these smaller stores are more nimble. they change their assortments. wal-mart places so far in advance they have a little bit left over. it is not the way we have seen dollar general. >> kind of disagree. >> we love you but i'm pushing back. >> i love you back but i'm going to push. >> combined with sales 27 billion. wal-mart is $480 billion. this is a remora on the back of a whale shark. >> understood. i would be concerned about it because it is two different animals. wal-mart was predominant in their time. family dollar and dollar general are predominant now. why did they launch the app so they get savings. >> i am in the brian camp. i agree that wal-mart is nervous about the dollar stores and the market share they have taken. this combination doesn't change the landscape anymore than
yesterday. we are combining stores that were there and aren't really changing the competition. maybe they get sacost savings dn the road. >> do you think dollar tree will be out of this? >> i am not the expert the way courtney is but i would think family dollar and dollar general. speaking of the app we referenced does anybody remember this ad from the early 1990s? >> excuse me, last week i bought this. >> plus 10% of the difference. >> and today i saw this. just opened the paper and there it was. >> it's that easy. >> that's it? >> that's it. >> cool. >> obvious creepiness aside wal-mart is upping the ante with its new ad. >> this savings catcher can save you more money on top of the money i have already saved.
how awesome is that? i submit the receipt. if some other store is advertising a lower price i don't have to drive all over town. i just get the difference. caching. >> wal-mart says their every day low prices. wal-mart just admitting that other people may have lower prices. >> i rest my case. they are going to town on it and it will be the cheapest mark down they have to pay for. it is very smart. >> do you think the comparison is only with big box retailers? it would be difficult if it is against the mom and pops. >> the mom and pops can't compete on costs. >> that is the point. this is another nail in the coffin. >> absolutely. >> i think that was your point. >> that was my point. >> once again. >> big players like wal-mart and target. >> listen, i know it is great and puts money in your pocket.
at some point is this a retail race to the bottom in terms of margins? companies have to make money. mom and pop need to make money to live. >> it probably is -- i don't think this is any surprise this is happening. if you have to cut your prices make a game out of it. try to win me and get me to buy a couple more items. it is going to be a race to the bottom for margins. what other choice do we have? >> thank you very much. coming up, where is the beef? apparently it is with herb greenberg. mr. salt free will join us and talk about ipos and the new order of the american restaurant business. >> we are bringing you a mystery number. so what does $2.4 trillion mean to your money? is it the total dollar amount of all u.s. student debt or federal tax revenues taken in this year
this toy is a reminder that someone cares. these are a chance to be part of a team. and this is a chance to succeed. female announcer: with your support, the employee owners of sleep train are proud to dedicate their time, hearts and resources to giving local foster children one important thing: hope... hope... hope... not everyone can be a foster parent... but anyone can help a foster child. children: ♪ sleep train child: ♪ your ticket to a better night's sleep ♪ the dow is currently near record highs. leading the way higher so far for the blue chip average united
technologies as well as goldman sachs. a very interesting mix of companies. the broader move is to the upside. the dow is currently near session highs. reports say shake shack, a very popular burger chain with locations in new york and florida is considering an ipo. would it signal a top for the restaurant ipos? cnbc contributor is re-debuting here on "street signs." good to see you again. last gast want tabe? >> i think this will be a classic case. it is mostly a northeastern united states entity. number of overseas. anybody who has been in the stores, anybody past some of the greats, sustainable. >> why not? >> i don't live in new york. >> you used to live in new york. >> it wasn't there when i lived
in new york. 99% of the country is saying what is shake shack. >> shake shack is -- >> i know watt the shake weight is. >> it is an incredibly good concept when you understand. it is employee centric. the majority owner is union square hospitality. so that is very important. if this thing comes out you say it is going to get a lot of spin and focus. the investment bankers are going to be busy getting every person out there who has a concept to go public or private equity guys say after these bad deals like noodle and potbelly we have another window. it can be close to the top. >> it is such a competition for the consumer's dollar. this goes to the mcdonald's problem, too. now you have red robin. you have many custom gourmet
burger places that are open. you have tgi fridays and chili's. margins get squeezed. who is investing in any restaurant companies maybe except for buffalo wild wings which seems to be the exception every year. >> chipotle is the real exception every year. >> tell us something very interesting. we want to hear. >> what is very interesting here and gets lost in all of the noise and a blog called burger business. really the real growth in units for burger restaurants is on the local, very individual level. they are growing 6%. >> we have to go but i know you wanted to get in your point about five guys and smashburger unlikely to go public and that says a lot. >> there are others who say it is unlikely to go public. what is important about that is that they are franchise operations. their documents are available to the public if you want to dig
and look. the same store sales have been slipping. why would a franchisee sell if they are making money? it tells you a lot about the operation. says a lot. >> thank you as always. obesity is still the biggest market that pharmaceuticals will not touch. we have been speaking with one company hoping to change that. >> stand up seats and paper square toilet paper. let's hope not. we are looking at the other parts of the future of flying coming up. here at fidelity, we give you the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity.
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ask your doctor about cialis for daily use and a free 30-tablet trial. obesity the one that big pharma will not touch. you would think they would be all over it but they are not. >> it is kind of a miracle drug idea. when we are talking about obesity we are talking about something more severe than somebody wanting to lose a few pounds. it is a big smas dominated by a
small amount of companies. the cdc defines it of a body mass index of 30 or more. for somebody 5'9" it means he or she weighs at least 203 pounds. some folks take issue with bmi as the measure. until three years ago no drug had been approved in 13 years. two small drug makers broke through and a third drug is under review now. despite the potential patients the drugs have largely mixed sales expectations there has been a slow uptake among health insurers. now a new player, a small bio tech that had the ipo in june and testing a drug that aims to tackle obesity in a new way. we mentioned that you are aiming
to tackle obesity in a new way from drugs on the market already or being reviewed by the fda. maybe you can describe how your drug is different. >> our drug is a twice weekly injectable drug. what it does is it works to really impact the way the body handles fat. and so doing it it suppresses the way the liver makes fat and stimulates the release of fat from our adipose tissue. this goes beyond what we see going on with other drugs that just impact hunger alone. when patients take our drug they do tend to lose weight uniformally with a high response rate. >> you think people are willing to inject themselves when they don't have to? >> we do. the patients we are targeting initially first of all will have a rather severe genetic condition. these patients have devastating condition that leads to hunger that most of us just can't think
about it. it unthinkable hunger and their lives are ruined by that. in this setting their caregivers can give injections twice a week. we think that is acceptable. beyond that will be treating patients at the severe end of obesity. for me that would be 100 pounds my weight at my height. these are people in harm's weight and are used to injecting themselves with diabetes products. >> what i find interesting about your drug is that unlike past drugs that other pharmaceutical kaechs devel companies developed it doesn't impact the brain. you are targeting the liver but not changing the brain. >> that's right. although we know that the hypothalamus which is the part of our brain that sits behind our eyes is sort of the master regulator of the energy, metabolism and hunger. the other drugs that are available today really work
through that center which is actually damaged. and in doing so they are really focused on hunger control. our drug appears to reduce hunger in a way that is independent of that organ and really provides a different type of benefit. >> one thing that seems to have been an uphill challenge is that there is maybe a bias against treating obesity with drugs. maybe you can talk about that. does that bit exist? is that a problem for you guys? >> i think in general over the years people have regarded ob e obesity as a problem of the patient, that it is their responsibility to become lean again as if that works. we know from dozens of randomized trials they lose a little bit of weight, about 3% to 5% of the body weight over a year. that is about it. the example i was talking about somebody who needs to lose 100 pounds it is like 30% weight
loss and we know diet and exercise are out of that reach. we don't see that being a population or portion population that can benefit from diet and exercise. >> with diabetes you have $54 billion market there. obesity is much smaller than that. that is a side effect of obesity. how do we get to the point where we are treating the underlying cause of these and should we get there with pharmaceuticals? >> i was in the large pharm industry and working on diabetes that are accelerated by obesity. treating someone with diabetes who is obese is very, very challenging. getting after the underlying causes is important. there is very little research that is going on to understand why people become obese. i think everybody believes they know the answer. >> eating out lately? with all due respect. we sit around. we do nothing. we have long commutes and giant
portions of food. i just moved a box. we just moved rooms and i had to pack up photo albums. i was 3 years old and every picture nobody was overweight, not one person. not in my family, in every photo everywhere. i know according to government i have a 29.4. i'm overweight. i'm almost grotesquely obese. i have a long commute and i don't workout enough. >> you are not obese. you are not an obese patient. i will be if i don't run i probably still run 15 miles a week and i'm 20 pounds overweight. >> that is a misconception. >> i know why i'm fat. >> you are not fat. >> thank you. >> you have fat but you are not fat. if you look at the obese population there are people who are overweight because of changes in their diet and exercise patterns. this is absolutely true.
there are a lot of people who are obese because of genetic reasons and infections and damage to their part of the brain. >> that is a minute portion of the population. what do we do about the rest? >> maybe, maybe not. studies coming out that the hypothalamus is actually inflamed and scarred in many people who are obese. one thing we learn is high fat diets can cause that. what you are talking about is why people may become obese. >> that's what we are talking about here. i know we have to go. this is important. i'm sorry producers, i will buy them a hamburger. we are not blaming the people. you look at the portion sizes at restaurants. do we have a chance with what we are being served? >> maybe -- michelle obama, the first lady is making this -- we need to change our diet. should the food companies have
responsibility for paying for your drug? >> i don't believe so. let's think for a moment. preventing your way out of a problem works if you don't have the problem already. treating obesity with dietary prevention and exercise is like putting sun screen on melanoma. people have established obesity they need treatments to get out of that. unless we wake up to that fact and understand what is at the heart of the problem we will not have an answer to that. why are one third of the population leaning in the face of the same environment. >> thank you very much. why is the s&p 500 performed so much better than the dow this year? we will take a closer look in talking numbers ahead. another look at today's mystery number. 2.4 trillions. could it be total u.s. student loan debt, federal tax revenues
this year or money paid in bribes each year. we will tell you the surprising answer when "street signs" returns. during the two weeks at wimbledon. true tennis fans want to know what's happening. they don't want to just see what's happening, they want to know and understand why it's happening. anybody can just put data up, but we want to get a reaction, make it far more interactive. we rely on the cloud to provide that immersive digital capability. give fans more then just the game with the ibm cloud. the ibm cloud is the cloud for business. ♪ ♪
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signs." family dollar confirming it did receive a proposal from dollar general to acquire shares. it said it would carefully consider the proposal. family dollar shares trading higher by more than 5%. remember family dollar still remains subject to the merger agreement with dollar tree. this story is far from over. thank you very much. let's talk numbers and let us talk the dow and s&p 500. the s&p 500 is up nearly 7%. why the divergence. let's begin talking numbers. give us your views. does this put the nail in the coffin for the dow being measured by anybody as a reflection of the economy of the stock market?
>> i think certainly at some point it was but for the past decade if not longer it is too concentrated and focused on large cap and the fact that it is a price weighted index and has problems with it being representative of the overall market. so the s&p 500 really has a much more diverse and broad array of industries and sectors that you can have exposure to. so our preference is heavily the s&p 500 but mainly because of valuations and growth when you look at the indexes. >> if we take a look at the charts of the dow versus s&p we have one in front of our viewers now. what can you tell us from a technical perspective about the relative outperformance of the s&p 500 going forward? >> i would agree with a lot of those things, too. i don't think the dow is a great reflection of the market anybody and puts too much emphasis on the price. since the start of the year you
look at high priced stocks like visa, goldman sachs and boeing really a big drag on the dow while the top weight in the 500 apple, google have done much better. looking at the charts this is nothing new. if you look at the relative relationship between the two that line shows the dow jones industrial average has been under performing since 2012. there is catch up potential but we think the dow needs to perform in line with the s&p 500 before it can outperform. in other words, that line needs to base. until then the trend favors the s&p 500. >> you want to add something? >> i think that is highly unlikely given that forward earnings for the s&p 500 for fiscal year '15 we are looking at over 8% versus 5.5% for the dow. pretty unlikely that that is going to happen. >> be sure to check out the
online edition of "talking numbers." tomorrow marks the ten-year anniversary since google went public. of course, they have done really well. they have done great. up about 154%. tomorrow we show you companies that have done better than google and apple the past five years, names which don't get a lot of attention but pretty cool. >> pretty sexy. >> i think. it almost seems no one works out anymore unless they are wearing a device to track their every move. we will show you how pro sports teams are taking wearables to a new level. flying has become a huge pain. will it get more annoying or are there real improvements on the way? it is hard to imagine but we will take a look 25 years into the future of air travel. not necessarily jet packs, either. that is coming up next. tdd#: 1-800-345-2550 searching for trade ideas that spark your curiosity tdd#: 1-800-345-2550 can take you in many directions. tdd#: 1-800-345-2550 you read this. watch that.
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airlines and nucor. the biggest based on valuation. you see a lot of people working out with some kind of wearable device like a fit bit. let's take it up a notch because pro sports teams are taking wearable workout gear craze to a new level. >> reporter: as you said we see people with wearables on their wrists measuring calories, steps, heart rate. professional athletes are taking this wearable technology to the next level using data to improve performance on the field. major league soccer has been an early adopter of the technology. the san jose earthquakes are one of the league's teams to give this a try. basically players have the small
censors they place in the pocket of their under shirts. the censors send real-time data to an ipad. >> we have some instant feedback in terms of certain metrics that we feel important like heart rate, working at the upper limit of the heart rate that we want to be in and during our reps we know when they are down at a reasonable level before we can train again. >> now, catapult measures over 100 fields of data worn under the jerseys of athletes so the teams make up a portion of the nearly 4,000 folks who have used this technology. it has attracted some big-name investors such as mark cuban. the data does raise concerns. medical data is private data and other concerns people raised. players use the data to maybe
negotiate better salaries down the line. like it or not it does look like wearable technology can be a game changer when it comes to professional sports. tomorrow we look at google glass and how that may be changing the way you view your favorite sports teams. >> we will have more stories about how technology is transforming business. thank you very much. in honor of cnbc's 25th anniversary phil lebeaux got to come to new york. you are looking at the future of flying. please tell us it will be pleasant. >> it won't be. you have 275 people in a tube, how pleasant will it be? your airline experience is dictated by whether or not you have peaceful people and whether you are on time. when you look at the crowded skies ahead, you will see more congestion in the air. it is basically going to double
over the next 20 years according to the latest estimates out there. 6.7 billion people flying by 2032. what kind of planes will they be on? the animation coming from airbus is pretty cool looking but it is an animation and we do expect that we will see more light inside planes in the future. they also will have cabins with more humidity, a lot of the stuff we are seeing in the dream liner. in terms of service one person who does a lot of research on this thinks it will come down to more pricing. >> i think we will see the curtainless cabin. really this model taken to mean the end of traditional first class, coach and so on and really you buy the seat and the amenities you want and craft your own experience. >> one cool development we will probably see more of is openly bidding for seats on your
flight. in other words, if there is a seat open in business class they say take out your phone and put in your bid. how much do you want to pay to move up here now? you will see more of that. the pricing we talked about. the one question out there is whether or not cell phone calls will be allowed 25 years from now. my guess is probably not because people made it clear they don't want to hear it. >> it is so annoying. >> that is probably not going to be changed. finally, take a look at this. this is really interesting. look at the busiest hubs right now and look where they are expecting to be 25 years from now. atlanta not on the list anymore. where are the busiest hubs? dubai, beijing, hong kong. those are the busiest airports 25 years from now. >> no real surprises there. we have to go. we are running out of time. it is your last chance to guess what. our gigantic mystery number is
$2.47 trillion. is it the total dollar amount of all student loan debt, federal tax revenues taken in this fiscal year or the amount of money paid in bribes each year? the answer is next. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present.
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it is time to reveal the answer to our mystery number poll. 21% of all u.s. student loan debt. 50% said "b," federal tax revenues taken in so far this fiscal year. and 29% chose "c," the amount of money paid in bribes each year. well, half of you are right. the correct answer is "b" and federal tax revenues so far this fiscal year, brian. >> wow! so, $2.47 trillion in taxes flowing over just the last ten months alone. now consider this, estimates say the u.s. treasury might lose a total of just $20 billion over ten years from corporate tax inversions. let us repeat. about $2.5 trillion in ten months versus $20 billion over ten years. $2 billion a year. we just learned today that treasury secretary jack lew is looking at serious options on how to stop those so-called
inversions without getting congressional approval first. joining us from the economic policy institute, josh smith, senior policy analyst, and from aei, cnbc contributor. tax inversions are unseemly. and no one will argue that $2 billion a year isn't a lot of money, even today, but when you consider that the defense department spends nearly that per day or medicare fraud runs at least $60 billion a year, why do you think tax inversions are getting so much attention? >> sure, i think it's just because it feels wrong. i mean, if shoplifting were somehow legal, you as a bodega owner still wouldn't be happy about somebody stealing candy bars from you, even though they're only 99 cents each time. there's something wrong about it that corporations are taking advantage of things normal people can't and it's revenue that should be going to the treasury. >> but still, josh, it feels wrong doesn't seem like a good argument. there are a lot of things that feel wrong and are unfair out there, but should we be spending so much, i don't know, scrutiny on something that just feels bad
when just the numbers don't really add up? i'm sure there are lots of other things that maybe congress could focus on apart from this, which is, you know, we're talking $20 billion over ten years. >> i think this is just something so obvious that congress doesn't really need to do much to fix. just the idea that a company doesn't really have to do anything, can still be listed on the new york stock exchange, still have their headquarters here but move on paper to another jurisdiction for tax advantage, that's a really easy fix that congress could make, congressional democrats have already proposed a fix that would really tighten the screws on these inversions. and really, that's why we're talking about them, because they would be so easy to fix. this is really a case of congress not taking action of just sort of sitting on their hands when there's a problem right in front of them that that could fix. >> jimmy p., is it that easy of a fix? >> absolutely. >> you know -- >> jimmy? >> listen, when i think about the big problems facing america right now, i don't think tightening the screws on american corporations as very high on my list. you talk about the $20 billion over ten years. it's kind of like another
version of the carried interest debate, which is another thing that's about $20 billion over ten years. how does that help solve america's big problem, which is we're not growing fast enough, all right? and having a much lower corporate tax rate will help economic growth over the long term. i mean, my gosh, this economy has not grown very well for like 15 years. so, maybe congress should spend a little bit of time on some of these longer-term solutions, rather than trying to win the midterm election, which i guess this is a good issue for democrats in the midterm election, but it doesn't really help america very much. >> yes, but jimmy, you know, it's great politically. i mean, this is your town, d.c. i mean, they -- that's what gets the attention. it's not look over here, it's look at this. >> yeah, i mean, it should get the attention, but i would like to see it as a catalyst, you know, for fundamental corporate tax reform. it should be a catalyst. this should be saying, listen, there's something deeply wrong with our corporate tax system that our only -- that to keep companies from fleeing, they have to tighten the screws on them and create some sort of
straight jacket to keep companies here because it's bad to do business in the united states. i want the united states to be a great place to come, for immigrants to come, for businesses to come, for foreign capital to come. this isn't it. >> you know, josh, to finish up, i mean, i was reading some reports basically saying that a tax inversion doesn't even necessarily produce better-than-average returns for the company, but you believe it's really all about the companies, the multinationals wanted to be able to access the trillions of dollars they've got stashed overseas. wouldn't it be easier maybe to have some kind of, like, change in the tax code, like i don't know, taxing it when it's -- when and where it's earned as opposed to the repatriation to, like, smooth this over? >> mm-hmm, i think that's exactly right, moving to a real worldwide system where companies get taxed on the income when they earn it as opposed to when they bring it back to the united states would really help, you know, the federal government's bottom line. it would make sure that these companies don't have an incentive to invest overseas rather than here. and it would bring so much money back to the treasury that then we could talk about lowering the rates. >> and jimmy, quickly, to
mandy's point, mark cuban said it best, if the company whose shares i own does this, i'll dump the stock. if shareholders penalize companies, it will end tomorrow. >> that's right, but it's not government's job to figure out whd and bad business practices -- >> that's what i'm what i'm tal >> josh and jim, thank you very much. a new york landmark could soon have a controversial new owner, but will it hurt the bottom line? that's the question. stay with us.
the sultan of grueni is one of the favored bidders to buy the plaza hotel in new york city, a bid for reportedly $2.2 billion. the sultan also owns the beverly hills hotel. so, why is this a bit controversial? well, because of his country's strict enforcement of sharia law, which could mean stoning for adultery and homosexuality among many harsh penalties, but cording to reports, that hasn't hurt booking at the beverly hills hotel. i don't know, maybe because they're international people staying at the beverly hills hotel and don't know about it? >> yes, it's mostly international and a lot of people haven't been paying attention to this boycott. and i think a lot of this will be the same with the plaza. most people that stay at the plaza, which is now a smaller hotel, are probably not aware of this. this is a business deal. if he buys this, it won't matter, especially in new york city. >> nothing seems to matter to him. >> nope. he's the sultan.
>> let's switch gears. you just got back from pebble beach. how did you survive out there? >> i know. combat pay is -- >> it really is tough. it's interesting, because you and i talked before you went about some of the muscle cars and the hot mercedes. they always command the money, ferraris. tell us about the japanese car model. >> you were the first to predict this and it's really coming true. >> thank you. >> you talked about this a year ago. don't junk that honda, because it may become a collectible -- well, not really, but japanese cars are reaching insane prices. look at this 1967 toyota 2000 gt. that broke the seven-figure barrier over the weekend, selling for $1.1 million at gooding. they sold a gt for over $1 million. and this 1967 mazda. wait until you see the last one, a nissan skyline, went for $252,000. that was twice the estimate. this car was a predecessor to one called godzilla. jay leno told us that he thinks the first prius, priuses?
will become collectibles in 20 years. they can actually do 60 miles an hour -- >> pri-i? >> got to leave it there. >> thank you so much. >> thank you for watching "street signs." >> "closing bell" is next. see you tomorrow. welcome to "closing bell." i'm kelly evans here at the new york stock exchange, where we're in full rally mode today, tyler. >> sure are. hi, kelly. i'm tyler mathisen at cnbc headquarters in for bill griffeth. this is not a boring mid-august day for the markets, not at all. merger and takeover news along with relative calm, apparently, between russia and ukraine helping to take the market higher and in a big way. >> yeah, dow up 167 points. as art cashin put it earlier, this is what geopolitical risk-off looks like, because it's not just stocks responding